Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102642
Authors: 
Keser, Claudia
Montmarquette, Claude
Schmidt, Martin
Schnitzler, Cornelius
Year of Publication: 
2014
Series/Report no.: 
Discussion Papers, Center for European Governance and Economic Development Research 218
Abstract: 
In this paper, we investigate in a controlled laboratory experiment physician behavior in the case of payment heterogeneity. In the experiment, each physician provides medical care to patients whose treatments are paid for either under fee-for-service (FFS) or capitation (CAP). We observe that physicians customize care in response to the payment system. A FFS patient receives considerably more medical care than the corresponding CAP patient with the same illness and treatment preference. Physicians over-serve FFS patients and under-serve CAP patients. After a CAP payment reduction in the experiment we observe neither a quantity reduction under CAP nor a spillover into the treatment of FFS patients.
Subjects: 
experimental economics
physician reimbursement
capitation
Fee-For-Service
customization
fee regulation
JEL: 
C91
I12
I18
Document Type: 
Working Paper

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